Last year, in Mar 2021, my wife and realized that we would exceed the Roth contribution limits for tax year 2021. We stopped our monthly Roth contributions with Fidelity after 2 months, then had Fidelity do a recharacterization back into our accounts. We did not recharacterize to our tIRAs. We received 1099-Rs last week for the gross distribution and taxable amount, with codes 8J in block 7. When inputting this into TT, it says we are to pay an early withdrawal penalty of 10%. We've had our Roth IRAs for greater than 5 years and are both over 591/2. Is this correct? In addition, the entire Roth contributions (not just the taxable amounts) appear to be added to our AGI even though we did the "undo button." Is this accurate? Doesn't make sense to me. TIA to all.
